Purchasing a home is an important investment that generally pays off big returns in the long run. Most experts agree that buying a house is a great way to build wealth in the future. Although real estate markets go up and down, over the long run they tend to increase. Additionally, in many markets it’s cheaper to own than rent. Interest rates have remained near all time lows allowing the cost of financing to remain cheap.
The first step to purchasing a home is financing – First time home buyers need to know how to get pre approved, and what that requires. How much can you afford? Or better yet, how much do you want to pay each month for a house payment? Is your credit scores good enough? How much money will you need to put down? What loan program? 100% USDA Rural Housing, FHA, VA or Conventional mortgages? All questions that need to be answered before the home shopping begins.
Many housing markets provide good opportunities for first time home buyers right now. This is mainly due to the availability of quality homes on the market and the current low interest rate environment which allows you to afford a larger home than say just a few short years ago.
To get pre approved for a home loan, you’ll need to speak with a loan specialist who will walk you through the complete first time buyer process:
- Initial Interview – expectations and goals. Financing requirements
- Complete an loan application
- Review your loan qualifying options
Initial Loan Application Interview:
First time home buyers need a quality loan officer, someone who knows how to communicate the pre approval process well and can answer your questions with ease. The loan advisor will want to know how much you feel comfortable paying each month and often times that amount is similar to what you’re currently paying in rent each month. The loan officer will talk about your goals such as how long you intend to own your first home or if there is a particular section of town or school district in which you’d like to live. What down payment amount can you afford?, etc.
Complete Mortgage Application:
After the initial review, you’ll be asked to complete a loan application so the loan advisor can get a firm idea on your present situation such as how long you’ve been at your job, your gross monthly income as well as the all-important credit report. Once you apply, your loan advisor will review your application and credit report and prepare some options for you to consider.
Discuss Your Options:
As a first time home buyer you’ll likely be surprised at how much home you can actually afford given today’s affordability index. The affordability index is combination of housing prices, current interest rates and gross monthly income. Interest rates are staying low as we begin 2016. The loan advisor will review your mortgage options for you to include not just how much you can afford but also how much you’ll need to provide as a down payment (if any) plus closing costs and related inspection fees.
Finally, your loan specialist will provide you with your letter of Pre Approval, a formal letter that indicates to a seller that you are serious about buying your first home, you have applied for a mortgage and your credit report has been reviewed. This will also indicate your approval loan amount, loan program and other terms.
Any U.S. home buyers that have questions about applying for a 100% USDA mortgage can learn more at www.UsdaMortgageHub.com or just call toll free 800-691-8826 Applicants can also submit the Quick Contact form on the right ( mobile users please see the menu section)